In my last blog I talked about how the insights sales management survey highlighted sales forecasting as a key challenge for sales managers in the coming year. Unreliable forecasting has been an issue long before the current crisis but with volatility, uncertainty and risk at an all-time high getting greater accuracy
in forecasting is more important than ever.
If you are going to make reliable forecasts here are the key elements that you need to consider:
- Are your forecasts driven by metrics historical and current?
- Do you understand what the key external factors are that affect your customers?
- Do you have a strong buyer centric sales process linked to your CRM?
- Have your sales people been trained to make accurate forecasts?
- How good are you as a sales manager at interpreting figures and understanding people?
Many years ago I worked as part of the new store opening team for a major super market retailer one of the things that still impresses me was how accurate the marketing department was in predicting sales for the first 6 months of a store opening. They were using data lots of it to create accurate dependable predictions upon which investment decisions were made. In B2B sales effective sales forecasting also needs to have input from metric data:
- When in the business cycle do customers purchase?
- How much do they purchase each time?
- What is their purchasing pattern?
- Are there any internal external changes that will affect the pattern?
- Do you track sales activity linked to your sales process?
A leading manufacturer that I work with has steady reliable sales of capital goods in its European market but in August 2012 using market data they saw a commodity price trend that increased key prices to their customers whilst also reducing the price that were charged to the end user. Solid metrics enabled them to predict accurately before the event that capital goods sales would stagnate in Europe and implemented a strategy quickly and efficiently that refocused the business keeping them lean and ready to return to growth a year later. Metrics and data are powerful tools if you have them. The business is now growing again.
A strong sales process built on buying behaviour rather than selling steps with a CRM link should enable you to track activity and movement through the different stages of your process. Identifying the buyer behaviour that indicates movements through the process gives a more reliable prediction of deals that will be done and when they will complete.
Data though is only half the story the other half is about people. When I started my business career I worked in a retail leisure environment and one of the best bits of advice I got from my area manager was “get out on the floor and find out what your customers want, aspire to, what are they telling you about the competition, why do they come here today and go somewhere else tomorrow, ask them how much are they going to spend tonight?” So an effective manager spent her time talking with customers and staff and listening because when my area manager walked into my unit one of the first questions he asked me was “How many people are you going to get in tonight? How much are you going to turnover?” Tough questions which at first I thought was nonsense “I mean how do I know – last week we did X so I assume that this week we will probably do X as well?” My boss did not find this attitude helpful and was not shy about saying so but he was also a good coach his success
after all was in part depended on mine. The skills and behaviours he coached me in are still relevant today and as valuable to B2B sales as they were to retail sales:
Using assessments from sales assessment.com has enabled me to cross relate weaknesses in forecasting with behaviours and skills that sales managers don’t necessarily associate with forecasting:
The ability to ask questions and test assumptions is something that successful sales people use to identify needs and develop opportunity however it is also crucial for forecasting because a sales person who doesn’t probe and test is highly dependent on the person they are speaking to and often will accept at face value the probability of an order and the timing of that order. High performing sales people will question and probe in order to form their own judgement.
To be comfortable and skilled with listening so customers talk about future plans that may affect the ordering cycle, but also hear the nuance of throw away lines like: “most probably” “We are really happy with this and I think we will.” Listening is first an attitude then a skill and poor listeners only hear “Order” casino online not the caveats or hesitations that surround it. Such as “yes we will most probably be making a repeat order for X next month” by the time the sales person gets back to the office this has become a definite and is fed into the forecasting system then when the order is not placed we are surprised and often blame the customer.
Networking and liaising another
competence that is often under estimated is important in making a sale but equally talking with other members of the decision making unit will enable a sales person to judge what other agendas may affect the reliability of the sales forecast. It is not enough to have a list of other decision makers sales people need to develop networking skills over and beyond saying hello and be prepared to question, challenge and probe, something that some sales people do after a sale is lost but resist doing so whilst the sale is in progress.
Average sales people who find it difficult to ask tough questions to people in their customer
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network will rely on their primary relationship and gut instinct to make their sales forecast. Instinct should not be ignored but often sales people don’t want to ask too many tough questions in case it jeopardises the sale. Sales people with high performance potential without an effective sales manager to coach them to build their confidence to ask tough questions and network and liaise to build consensus and cross check agendas will struggle to make accurate sales forecasts and raise their overall game to high performer.
SDV are specialists in Sales Development and have designed and delivered bespoke Sales Forecasting programmes for companies large and small in the UK and abroad. To find out how we can help your Sales Managers forecast Sales more effectively contact us on 01934 843575.